Restaurants behind June increase in franchise jobs, report says

Restaurants fueled a 27,910 rise in franchise jobs in June, according to a report released Wednesday by a national payroll processor.

About 75% of private-sector franchise jobs added last month were from restaurants, the ADP National Franchise Report found. It’s an increase over the 19,160 jobs added in May.

“Restaurants can be credited for the majority of the growth and are followed by, to a lesser extent, gas stations [and] auto repair shops, business services and accommodations,” Ahu Yildirmaz, senior director of the ADP Research Institute, said in a statement.

The leisure industry -- amusement parks, gambling and golf courses -- lost 790 jobs in June. About 520 jobs were lost in the personal services industry, which includes hair and dental care. And Real estate lost 400 jobs, according to the analysis.

California added 31,040 jobs in June, the ADP reported last week. Most of them were in the service sector.

It makes sense that the largest growth would be in the restaurant industry -- they make up about half of franchises, said Mark Zandi, chief economist at Moody's Analytics.

"The economy is improving -- more people are eating out so restaurant sales are pretty good," Zandi said. "Broadly speaking, franchise employment is growing a bit faster than overall employment."

Compared with last year, franchise employment is up 2.1%, Zandi said, compared with total employment's 1.7%.

"Franchise job growth is slightly higher, but only by a bit," he said. "We don't expect restaurants to continue to grow at the current rapid pace."

The ADP produced the report in collaboration with Moody’s Analytics Inc.